Susanna Riva For more than four years, the war on Europe's border has transformed Brussels' politics, going from a latent concern to a reality that erodes the very foundations of the Union. The conflict has devastated southern and eastern Ukraine , but the implications for Europe go beyond the battlefield: the need to support Kiev and contain Moscow has severely tested the continent's economic resources and political cohesion.
With current US President Donald Trump threatening to reduce American aid and impose a solution unfavourable to Kyiv, Europe faces the prospect of having to shoulder much of the burden alone. Even if the crisis is resolved, the Union can no longer rely on Washington to guarantee its security; it must therefore build its own financial, industrial, and energy capacity.
European funding: from the ERA loan to the new €90 billion fund
In 2024, the EU contributed €18,1 billion to the G7 Extraordinary Revenue Acceleration (ERA) program , earmarked for support for Ukraine. This April alone, the Union closed a new €90 billion loan , implemented without direct US funding.
These interventions show how mutual debt issuance is becoming the norm, reminiscent of the €750 billion NextGenerationEU created during the pandemic.
The role of frozen Russian reserves
Moscow's sovereign reserves, mostly blocked at Euroclear in Belgium, represent a potential source of liquidity for further lending. Differences of opinion—Belgium fears Russian legal action and an impact on its financial position—have so far prevented coordinated use. In reality, the risk is overstated: burden-sharing among member states would unlock additional credit capacity without excessively burdening individual countries.
Sanctions and Energy Dependence: Current Limits and Future Scenarios
This month, the EU adopted the most comprehensive package of sanctions against Russia, but the measures added numerous designations without significantly expanding the prohibited activities. Gas imports via pipeline remain permitted until autumn 2027, maintaining a strategic vulnerability. Comparing data from the Sea of Hormuz, before February, approximately 20 million barrels per day of oil and 110 billion cubic meters of LNG were circulating; Russia, meanwhile, exported 6,5 million barrels and 43 billion cubic meters of LNG last year, about a third of the oil and two-fifths of the canal's LNG.
Concrete actions against addiction
To reduce dependence, the EU must accelerate the transition to alternative energy sources, increase storage capacity, and incentivize investment in domestic energy production. At the same time, it is essential to focus on favorable tax structures for defense and emerging technology companies, creating a deeper capital market capable of financing long-term projects.
Lessons from the American corporate experience
In the United States, strong capital markets have allowed SpaceX to finance the development of Starlink , a technology now crucial to Ukrainian communications. Europe must also equip itself with the fiscal capacity to support similar innovations, avoiding dependence on unilateral decisions by external entrepreneurs or governments.
Building a truly European war economy requires three pillars: a coordinated system of mutual debt , a more effective sanctions strategy , and a capital market capable of fueling defense and technology. Only with these elements can Europe guarantee security and autonomy in an increasingly uncertain international context.